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Spotlight on Stock Market -1

Subsidiary cos fail to attract investors

By Shafi Ahmad
The very name holding company i> a misnomer. Actually the disinvcstcd companies. of which 49 per cent shares were sold to the investing public (34 per cent ) and the employees (15 percent ) by the Government, are the subsidiary companies and not holding companies. Unfortunately this is a common mistake of both the Government authorities as well as so-called experts of our society. They always mention these subsidiary companies as holding companies.
The privatisation policy of the Government started during the period of military regimes after August, 1975. During General Zia's Martial Law Government, the disinvestment policy was first started. A few number of profitable industrial units were sold to private Individuals through auction. Receiving a very nominal percentage of the quoted price in the auction, the government handed over those Industrial units to the bidders. A nominal to la ke over the current assets of the units in gallon. Thus, and management oT^he units of industries in question, M Is learnt that the bidders started
selling those current assets. These are wry much iDegal
According to the latest available informations, quite a good number of biders have-not yet completed the payment of quoted price of those auctions. Il is learnt side by side that the bidders who did not complete the payment of quoted auction price as yet. have acquired huge properties either in their own name or in others name during this period of taking over the management of these units till dale though, these bidders did not pay the dues lo the Government. This non-payment of dues against the re speettve units are clear viola Hons of the terms and condi Uona aa agreed upon by the bidder*. But. even then, the bidder* were not penalised nor any trial took place against those violations Rather. they were rewarded in the form of either nomination to different high powered commit leva formed nationally by the
Ing in international forum* under the supervision of the gov
During the Martial Law of General lr*had, thia policy of ferent shape and system of
implementation. This lime the Martial Law Government decided to hold 51 per cent of shares of the disinvested units and the rest 49 percent shared were sold though prospectus to the Investing public (34 percent and the employees (15 percent). In these cases, one very irregu lar/lmpropcr step was taken by the Government. That Is, the valuation of these units were not properly done. In most of the cases those units were very heavily over-valued. This was done due lo nonavailability of proper representation In those valuation commit levs. Aa a result. In most oh the cases thorn- disin vested units failed lo earn profit out of the abnormal she of capital base of those unite.
Ifefore Ms pre mature death on Saturday nfcht. lb* author submitted two write-ims on stork market to The Darty Star We deeply mourn his death and pray Jar Oar saivaiton < the departed soul Today . ar Urie Is the firtt Instalment qf the two-part series on the Spotlight on stock market'. The views etavvssed here are essentially of dw author and not qf The Darty Star.
- Economic Editor